Europe Approves Solar Deal, Chinese Solar Stocks Mixed

By Ben Levisohn

China and Europe have moved one step closer to avoiding a solar trade war. Today, Europe approved a deal between the two that would remove tariffs on Chinese solar panels but also limit how cheaply they can be sold.

The European Commission approved trade chief Karel De Gucht’s plan for curbs on Chinese solar panels, allowing import tariffs to be removed next week in Europe’s largest dumping dispute.

The commission, the European Union’s executive arm in Brussels, today endorsed a negotiated settlement with China that sets a minimum price and a volume limit on EU imports of Chinese solar panels until the end of 2015. Chinese manufacturers that take part will be spared EU duties meant to counter below-cost sales, a practice known as dumping.

Solar stocks are mixed on the news. While Trina Solar (TSL) has gained 1.8% to $7.45 and Canadian Solar (CSIQ)has climbed 1.3% to $14.57, LDK Solar (LDK) has dropped 3.1% to $1.58, Hanwha SolarOne (HSOL) has fallen 2.8% to $3.43 and Suntech Power Holdings (STP) has dippe 1.4% to $1.37. Maybe because the only news that would have mattered would have been a European Commission rejection?

In other news, Siemens expects Japan to continue a shift away from nuclear energy. Reuters reports:

Siemens AG, Europe’s biggest engineering company, expects Japan to almost double its capacity of renewable energy by 2030, while continuing with nuclear power generation even after the Fukushima disaster.

Renewable energy may account for 35 percent of capacity in 2030, compared with 19 percent in 2011, Kenichi Fujita, senior executive operating officer at Siemens Japan K.K., told reporters in Tokyo today. Wind power may provide more than half of the renewable capacity, he said.

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There are 4 comments

AUGUST 2, 2013 11:22 A.M.

gebby wrote:

the idea that Japan will only double its renewable capacity by 2030 seems low. That is 18 years away. It could easily be 75-100% of their energy profile.

AUGUST 2, 2013 11:31 A.M.

ChinaSolarLover wrote:

Solar group is clearly in a consolidation process, while some of the earlier gainers are cashing out, other new comers are taking over the shares at every shallow dips. In fact, yesterday's somewhat crazy selling on SPWR after its not-so-bad earning report, has created a buying opportunity, therefore we've seen buyers jumping in, pushing SPWR higher by 3% so far. As I said in yesterday's note, when all said and done, SPWR should stabilize at around $26, waiting for next round of catalyst.

As for Chinese solar stocks, they are also going through some adjustment. We saw some mild selling today on SOL, with size at around 1mil shares so far, but we also saw continued buying into TSL, CSIQ, etc. My guess is, in the next couple weeks, the solar group will go through some heavy earning releases, including FSLR on next Tues., SUNE on Wed. and Chinese ones in the following week. Since SPWR has caused some jitteries, people are playing some cautions as of now. Once we have gone through FSLR and SUNE wil good momentum, then Chinese ones will certainly bring another round of buying into solar sector.

In conclusion, I consider the next week or two to be a good period to watch. If we are lucky to get a dip of 10% on any of the above major solar stocks as SPWR did yesterday, especially on Chinese ones, then investors should take advantage of it and buy into these tier 1 stocks forcefully. After the next month of earning season, we could see another round of steady up turn.

Good luck to all!

AUGUST 3, 2013 4:06 P.M.

fisherme_1 wrote:

Is HSOL still a Chinese solar company? I thought Solarfun Power Holdings was a Chinese company and Hanwha Group, a South Korean company, purchased Solarfun Power Holdings and renamed it Hanwha SolarOne 2 or 3 years ago. Can anyone clarify?

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Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. The Barrons.com Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools.